NVIDIA Corp. (NASDAQ:NVDA)

The valuation metrics exhibit a period of extreme volatility characterized by a significant peak in multiples during early 2023, followed by a sustained contraction through early 2026. This trajectory suggests an initial phase of aggressive market pricing that eventually normalized as earnings and operating profits grew more rapidly than the share price.

Price to Earnings (P/E) and Price to Operating Profit (P/OP)

Both ratios demonstrate a nearly identical correlation, peaking simultaneously in April 2023 at 200.72 for P/E and 213.98 for P/OP. This represents a period of maximum valuation expansion. Following this peak, a consistent downward trend is observed, with the P/E ratio declining to 33.88 and the P/OP ratio to 33.32 by April 2026. This contraction indicates a shift from speculative pricing to a valuation more closely aligned with realized fundamental performance.

Price to Sales (P/S)

The P/S ratio experienced a rise from 20.32 in May 2021 to a peak of 37.18 in April 2023. While it followed the general upward trend of other multiples during the growth phase, the subsequent decline was less precipitous than that of the earnings-based ratios. The ratio settled at 21.33 by April 2026, suggesting that while the revenue multiple remains elevated compared to the 2022 lows, the extreme premium seen in 2023 has dissipated.

Price to Book Value (P/BV)

The P/BV ratio showed a different temporal pattern, reaching its maximum valuation of 57.48 in April 2024, a full year after the P/E peak. This delayed peak suggests a period where the market placed an extraordinary premium on the company's net assets or intangible value. Following this apex, the ratio entered a steady decline, ending at 27.67 in April 2026.

Overall, the data reveals a transition from a hyper-growth valuation phase to a period of stabilization. The convergence of P/E and P/OP at lower levels by 2026 indicates a significant increase in the underlying profitability relative to the market price, reducing the overall valuation risk compared to the 2023 period.

The valuation trajectory indicates a transition from high-multiple speculative growth to a valuation grounded in substantial earnings expansion. While the share price experienced an overall aggressive upward trend, the Price-to-Earnings (P/E) ratio exhibits a cyclical pattern of expansion followed by a prolonged period of compression, suggesting that earnings growth eventually outpaced share price appreciation.

Share Price Performance

A sustained bullish trend is observed, with the share price increasing from 15.70 in May 2021 to 223.47 by April 2026. Significant acceleration occurred between January 2024 and July 2024, where the price rose from 67.47 to 125.61, eventually peaking at the end of the analyzed period.

Earnings Per Share (EPS) Growth

Earnings exhibited moderate volatility in the early period, reaching a trough of 0.18 in January 2023. Following this low point, a period of exponential growth is evident, with EPS rising from 0.19 in April 2023 to 6.60 in April 2026. This represents a significant increase in fundamental profitability that supports the rising share price.

P/E Ratio Dynamics

The P/E ratio underwent three distinct phases. First, a period of instability occurred between 2021 and 2022, with ratios fluctuating between 48.55 and 97.36. Second, a sharp valuation spike occurred in early 2023, peaking at 200.72 in April 2023; this was primarily driven by the synchronization of a rising share price with declining earnings. Third, a consistent compression phase began in late 2023, with the ratio declining from 65.31 in October 2023 to 33.88 in April 2026.

Valuation Conclusion

The inverse relationship between the P/E ratio and EPS in the final two years of the data suggests a fundamental re-rating of the stock. The decline in the P/E ratio from its 200.72 peak to 33.88, despite the share price reaching record highs, confirms that the valuation is increasingly supported by actual earnings rather than purely by market expectations.

The valuation profile reflects a significant transition from a high-multiple growth phase to a period where operating profitability has aggressively caught up with share price appreciation. While both the share price and operating profit per share grew substantially over the analyzed period, the rate of profit growth eventually outpaced the rate of price growth, leading to a compression of the valuation multiple.

Share Price Movement

A strong upward trajectory is observed, with the share price increasing from 15.70 US$ in May 2021 to 223.47 US$ by April 2026. The growth was non-linear, experiencing a period of contraction and volatility throughout 2022 before entering a phase of rapid acceleration starting in early 2023.

Operating Profit Performance

Operating profit per share remained relatively stagnant between May 2021 and April 2023, fluctuating between 0.17 US$ and 0.40 US$. However, a sharp inflection point occurred in July 2023, after which profit per share grew exponentially, reaching 6.71 US$ by April 2026.

P/OP Ratio Volatility and Trend

The Price to Operating Profit (P/OP) ratio exhibited extreme variance. An initial period of high valuation was followed by a dramatic spike that peaked at 213.98 in April 2023, indicating a period where market expectations far exceeded current operating results. From July 2023 onward, a consistent downward trend is evident, with the ratio declining to 33.32 by April 2026.

Valuation Interpretation

The steady decline in the P/OP ratio from its peak suggests a fundamental re-rating of the stock. The compression from 213.98 to 33.32 indicates that the increase in share price is now more firmly supported by actual operating profit growth rather than speculative anticipation.

The analysis of the price-to-sales (P/S) ratio reveals a period of significant volatility followed by a phase of valuation compression, despite a consistent and substantial increase in both share price and revenue per share.

Share Price Trajectory

A long-term upward trend is evident, with the share price ascending from 15.70 US$ in May 2021 to 223.47 US$ by April 2026. While there was a period of contraction in early 2022, where the price dipped to 15.09 US$, the subsequent growth was exponential, particularly accelerating after January 2023.

Sales per Share Growth

Revenue per share exhibited a steady increase throughout the period, growing from 0.77 US$ in May 2021 to 10.47 US$ in April 2026. A marked acceleration in sales growth occurred starting in October 2023, shifting from incremental gains to substantial quarterly increases, which suggests a significant scaling of operations.

Price-to-Sales (P/S) Ratio Dynamics

The P/S ratio experienced three distinct phases. First, a peak in valuation occurred in October 2021 at 32.92, followed by a sharp decline to a period low of 12.64 in July 2022. Second, a rapid re-valuation took place between January 2023 and April 2023, where the ratio peaked at 37.18. Third, from April 2024 onward, a downward trend in the multiple is observed, settling at 21.33 by April 2026.

Valuation Synthesis

The convergence of the share price and sales per share indicates that while the market valuation increased, the growth in underlying revenue eventually outpaced the growth in share price. This is evidenced by the P/S ratio declining from its 2023 peak even as the share price reached all-time highs. The reduction in the multiple suggests that the valuation became more grounded in fundamental revenue performance toward the end of the analyzed period.

The Price to Book Value (P/BV) ratio exhibits significant volatility over the analyzed period, characterized by an initial rise, a mid-term correction, a sharp escalation, and a subsequent period of moderation. The overall trend reflects a market valuation that has consistently remained well above the book value, indicating a substantial premium placed on growth expectations and intangible assets.

Share Price Dynamics

The share price demonstrates a strong long-term upward trajectory, increasing from 15.70 in May 2021 to 223.47 by April 2026. A period of accelerated growth is evident between April 2023 and July 2024, during which the price climbed from 38.95 to 125.61.

Book Value Per Share (BVPS) Growth

BVPS shows consistent and accelerating growth, rising from 0.75 in May 2021 to 8.08 in April 2026. The expansion of book value became more pronounced starting in January 2024, signaling an increase in the company's net asset base or retained earnings.

P/BV Ratio Trends

The P/BV ratio experienced a notable trough of 15.75 in July 2022 before entering a period of rapid expansion, peaking at 57.48 in April 2024. Following this peak, the ratio entered a downward trend, closing at 27.67 in April 2026. This compression suggests that while the share price continued to increase, the book value per share grew at a faster proportional rate during the final quarters.

The movement of the P/BV ratio from an extreme peak of 57.48 toward 27.67 indicates a gradual normalization of the valuation. This shift suggests that the market valuation is becoming increasingly supported by the growth of the company's tangible equity, reducing the reliance on speculative premiums relative to the book value.